ROAS (Return on Ad Spend)

Return on ad spend (ROAS) is a metric used to evaluate the effectiveness and profitability of advertising campaigns, measuring how much revenue a business generates for every dollar spent on advertising. To calculate ROAS, divide the revenue generated from an advertising campaign by the amount spent on that campaign. For example, if you spent $1,000 on an ad campaign and it generated $5,000 in revenue, your ROAS would be 5. ROAS is a crucial metric because it indicates the efficiency of your advertising efforts. A ROAS greater than 1 means the campaign is profitable, while a ROAS less than 1 suggests that you're spending more on ads than you're earning in revenue. It guides businesses in optimizing their advertising strategies to achieve a positive return on investment.